The U.S. Federal Reserve is inquiring into whether Goldman Sachs Group Inc. installed proper safeguards in place as it stepped up its consumer lending in recent years as part of a broad push into the retail banking sectors, The Wall Street Journal reported Friday.

Citing people familiar with the situation, the Journal reported that the Fed is investigating whether Goldman Sachs
conducted the correct amount of oversight at Marcus, its consumer brand.

The probe also includes Goldman’s compliance, audit and legal functions at Marcus, and whether the bank properly resolved any instances of customer harm, the report said.

Shares of Goldman Sachs fell 2.3%, even as the broader market rose on Friday.

“As we told The Wall Street Journal, the Federal Reserve is our primary federal bank regulator and we do not comment on the accuracy or inaccuracy of matters relating to discussions with them,” a Goldman Sachs spokeswoman told MarketWatch in an email.

The WSJ report came after Bloomberg reported that the Fed was scrutinizing Goldman’s consumer business.

The reports came a week after Goldman disclosed $2 billion in losses since 2020 in its platform solutions unit, which includes its credit card businesses for Apple Inc. AAPL, 1.89% and General Motors Co. GM, 0.22%, as well as its consumer lending unit GreenSky.

Goldman’s consumer-facing bank Marcus includes consumer deposit accounts, personal loans and is housed in Goldman’s profitable asset and wealth management unit. The results from Marcus are not broken out.

The bank has been cutting back on its consumer operation as part of an overall realignment of its business.

The Fed’s latest efforts on the consumer business starting with a standard review of the practice that began in 2021, The Wall Street Journal report said.

Goldman Sachs CEO David Solomon said on the company’s call with analysts this week that the bank tried to do too much too quickly with the business.

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